The Audit & Governance Committee of Shropshire Council met on 26 September 2025 to discuss a range of assurance reports, including updates on internal audit recruitment and performance, strategic risks, and the management of agency staff. The committee was also scheduled to review its terms of reference and the Internal Audit Charter. Additionally, members were expected to discuss the external audit of the Shropshire County Pension Fund.

Shropshire County Pension Fund Interim Audit Findings

The committee was scheduled to receive the External Audit: Shropshire County Pension Fund Interim Audit Findings Report 2024-25 from Grant Thornton UK LLP, for the year ended 31 March 2025. According to the report, Grant Thornton's audit work was substantially complete, and they did not expect any matters to require modification of their audit opinion or material changes to the financial statements. The report noted that the net assets of the Shropshire County Pension Fund were £2,626.4 million as at the end of March 2025. The report stated that the 2025 triennial valuation was well progressed, and preliminary results were expected in the autumn, with the anticipation that funding levels across the sector would improve. The key proposals of the government's response to the 'Fit for the Future' consultation were also noted, including:

• reforming asset pooling
• boosting investment in local areas and regions
• strengthening the governance of Local Government Pension Scheme (LGPS) Administering Authorities and LGPS pools. The Engagement Lead from Grant Thornton, Grant Patterson, noted in the report that there were some outstanding matters, including senior engagement team review, receipt of management representation letter, and review of the final set of financial statements. The report also included a summary of unadjusted misstatements identified during the audit.

Internal Audit Performance and Recruitment

The committee was scheduled to discuss the Internal Audit Performance Report and revised Annual Audit Plan 2025/26. According to the report, Internal Audit had issued nine reasonable, 12 limited and five unsatisfactory assurance opinions in the first five and a half months of the approved internal audit plan for 2025/26. The 26 final reports contained 175 recommendations, one of which was fundamental. The report noted that revisions to the 2025/26 plan provided for a total of 1,272 audit days, an increase of 64 days from those approved by the committee in July 2025. The committee was also scheduled to discuss the Internal Audit Recruitment Update. According to the report, the recruitment process was completed in April 2025, and successful appointments were made to the Principal Auditor IT position and one Auditor position. A further recruitment for a qualified and experienced Senior Auditor was completed in June 2025. The report stated that there were three vacant posts within the structure, these being one Senior Auditor Fraud and Investigations position, and two career graded Auditor/Senior Auditor positions.

Strategic Risks

The committee was scheduled to receive the Strategic Risk Update from Billy Webster, Service Director for Strategy. The report set out the council's current strategic risk exposure following the June 2025 bi-annual review. The report noted that the strategic risks are reviewed on a bi-annual basis. Following the bi-annual review and workshop, there were eleven strategic risks on the risk register, each managed by specific Executive Directors. These included:

• Failure to protect from and manage the impact of a targeted cyber-attack on ICT Systems used by the Authority.
• Inability to contain overall committed expenditure within the current available resources within this financial year.
• Inability to set a balanced budget for a given year within the MTFS¹.
• Failure of Officers and Members to adhere to Governance arrangements.
• Health & Wellbeing of The Workforce.
• Critical Skills shortage impacting on Recruitment, Retention & Succession Planning.
• Impact of extreme pressures upon partners (social care, health, and criminal justice)
• Responding and Adapting to Climate Change within our Available Financial Resources.
• Impact of increased waiting lists in relation to Deprivation of Liberty Safeguards (DoLS)², Occupational Therapy (OT) and Sensory Impairment (SI).
• Safeguarding Children.

Agency and Consultancy Staff Management

The committee was scheduled to receive an Agency and Consultancy Staff Management Update from James Walton, Executive Director of Resources (Section 151 Officer). The report provided an update on the progress made against the internal audit recommendations concerning the use of agency workers and consultants at Shropshire Council for the 2024/25 period. According to the report, of the 12 recommendations, 10 had been implemented with 2 in progress. The report noted that there had been a 25% reduction in the yearly cost of agency workers since 2022/23 compared to the previous years, with further reductions anticipated in 2025/26. The report also noted that the council had moved from Matrix to Opus People Solutions, a regional agency Solutions for West Midlands Councils.

The Lantern Management Update

The committee was scheduled to receive a First Line Assurance – The Lantern Management Update from Matt Jordan, Property Services Group (PSG) Facilities and Maintenance Manager, assessing progress on recommendations made in the 2021/22 audit of The Lantern. According to the report, the 2024/25 follow-up audit found limited progress, with 21 recommendations identified. Key concerns included:

• Lack of reconciliations, incorrect ledger postings, and noncompliance with financial procedures in income management.
• Inadequate budget oversight and variance analysis in budget monitoring.
• Lack of clear documentation and potential non-compliance with working time regulations in payroll & staff hours.
• Continued reliance on an ineffective booking system and security concerns over access management in system controls & cyber risks.
• Failure to collect evidence of hirers' insurance coverage, posing financial and legal risks in public liability compliance. The report stated that the assurance level was unsatisfactory, with no improvement from the previous audit.

Annual Review of Audit Committee Terms of Reference and Internal Audit Charter and Mandate

The committee was scheduled to review its Terms of Reference. According to the report, the Audit and Governance Committee's Terms of Reference reflect guidance from the Chartered Institute of Public Finance and Accountancy (CIPFA) in their: Audit Committees, Practical Guidance for Local Authorities and Police 2022 Edition. The report noted that there were changes proposed relating to the membership of the Committee and references to the Global Internal Audit Standards (GIAS) as applied in the UK Public Sector. The committee was also scheduled to consider the Internal Audit Charter and Mandate. According to the report, the Charter demonstrates how Internal Audit complies with Global Internal Audit Standards. The Audit Committee approves the Charter which incorporates the mandate, mission, code of ethics, definition and core principles of Internal Audit.

Other Business

The committee was also scheduled to:

• Consider the Audit & Governance Committee Decision Log 2025/2026.
• Receive an External Audit Letter on Financial Position Based on Period 4.
• Discuss Childrens Social Care Budget Management Update.
• Consider the minutes of the previous meeting held on 16 July 2025.
• Receive any questions from the public or from members.
• Exclude the press and public from the meeting for certain items.